Performance Pay Policy Miller School of Medicine. Faculty Council Sheri Keitz Joe Natoli
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1 Performance Pay Policy Miller School of Medicine Faculty Council Sheri Keitz Joe Natoli
2 Performance Pay Principle: All people do what they are incented to do. You will get more of what you incentivize; you will get less of what you don t. Need for written policy: Clearly define expectations and processes required for leaders, administrators, and individuals Articulate financial gates or triggers for payment Not a new paradigm
3 The Policy Purpose Align faculty clinical, research, education, and leadership efforts with business, operational and strategic goals of the Medical School and the University; Create systems and processes that link participants pay with key predefined performance indicators; and Clarify processes pertaining to the approval, accrual, and payment of faculty and staff incentives at the Medical Center.
4 The Policy Performance Pay Definition: Lump sum payment for exceptional performance against pre-established, clearly defined goals which align with organizational and business unit objectives Payment set after the audited close of the fiscal year based on overall medical center and departmental financial performance Merit pay (recurring adjustment to base) administered separately
5 Gates: Financial Performance Principles: Everyone contributes to overall fiscal and organizational success You can t spend money you don t have Gates: Departmental budget performance Medical School budget performance Financial Performance sets available maximum Individual performance sets payout % of max
6 Gates: Financial Performance Achievement of triggers is determined following the audited close of fiscal year Personal achievement of metrics accounts for 50% of incentive payment Departmental performance accounts for 25% of incentive payment Medical Center performance accounts for 25% of incentive payment
7 Gates: Financial Performance Medical center must operate at break even or surplus (i.e. overall year-end bottom line zero or better) If medical center in true deficit No administrative or leadership bonuses paid Faculty clinical, research, and education incentives may be earned up to 50% of overall bonus potential
8 Gates: Financial Performance Senior leadership shall review percentages (50% personal; 25% department; 25% medical center) and can change distribution at the start of each fiscal year. All incentive plans include same spread among personal, department and medical center goals. All payments are ultimately based on available funds at the discretion of the dean and senior leadership.
9 Participant Eligibility Types of performance pay plans Department plans (require approval) Individual contracts Dean and COO Direct Reports All metrics or milestones must be prospectively defined, measured and scored
10 Participant Eligibility Faculty and Staff Eligible role for 6 months In good standing and on payroll when goals are assessed and paid out
11 Exclusion Criteria Needs Improvement or Unsatisfactory Performance Evaluation Disciplinary actions Temporary and per diem staff If employment has been separated or terminated for any reason, eligibility will be lost.
12 Process and Caveats Prospective approval required Metrics defined and measured Must accrue dollars for payment No guaranteed performance pay Payment dependent upon behavioral compliance with SOM / University policies
13 Policy versus Execution Defining policy is not enough: we must execute Set clearly defined expected behavior Measure actual behavior Feedback, coaching in real time Optimize chances of success (personal + organizational) Effective Performance Measures Relevant Objective Interpretable Actionable (achievable with stretch)
14 Data Types Quantifiable systematic data Relevant Can respond to individual effort Be accurate, timely, objective Interpretable Behavioral / observational data Focus on observable behaviors Measureable milestones
15 Metrics Things that influence your domain and contribute to future success of enterprise 1. Mission Related 2. Function or Department Related 3. Strategic Aim of the Organization 4. Personal discretion / evaluation driven
16 Clinical Increasing market share Enhanced referral networks Mission Related Education Improving efficiency of education Increasing MD-MPH Research Grants Research-related media Service to our community
17 Strategic Aim of the Enterprise Sharing Resources across departments e.g. Shared Service Implementation Developing next generation of leaders Redesigning ineffective old processes and implementing new
18 Function or Department Related Budgetary (at the department or unit level) Strategic Departmental Growth Development Fund Raising targets Program Development Improving Employee Engagement
19 Discretionary Reflection of citizenship Economic incentive for behavior change Based on leadership evaluation including citizenship, demonstration of code of conduct, shared decision making, role modeling leadership behaviors At the discretion of the Dean and COO
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